On 12 December, 2017, Chile's Corporation for the Promotion of Production ("CORFO"), together with the National Service of Geology and Mining ("Sernageomin") and the University of Chile, released an interesting preliminary report about the potential to explore for and develop cobalt deposits in Chile: "Cobalt Mineral Resources in Chile – Exploration & Mining Potential" (the "Report").1 The Report identifies the districts of San Juan & Carrizalillo Alto (Atacama Region) and Tambillos (Coquimbo Region) as potential targets for cobalt extraction, together with copper and gold. These minerals are generally found together in small to medium scale deposits, breccias, mantos and veins within the Chilean Iron Belt. The Report relied on existing data and on-site visits of high and medium interest areas to identify cobalt deposits throughout Chile while focusing on the north of the country.2
Given the current trend of sustained growth in cobalt demand, which is expected to increase 34% yearly until 2026 along with the booming development of the electric vehicle market, the Report might be of interest to investors considering to do business in the mining sector.3
Cobalt in Primary Deposits and as a Sub Product
The Report pinpoints the Chilean Iron Belt as the main area where primary cobalt deposits are located "along the coastal cordillera and spatially related with the Atacama Fault Zone, both in the Atacama and Coquimbo regions." Data suggests that primary deposits of cobalt veins and mantos could also be located in the areas of El Volcán, Cajón del Maipo, Metropolitan Region, and Laguna del Maule, del Maule Region.4
As a sub product, cobalt is often found together with copper, arsenic, nickel and iron sulfide minerals, and therefore "based on Chilean metallogenesis, all copper and iron deposits could bear potential for cobalt sulfide/arsenide". IOCG, IOA and poryphyry copper deposits (in that order of importance) have the biggest potential for cobalt extraction.5
San Juan and Tambillos Districts: Cobalt Production Potential
Based on a 1983 exploration study and a 2008 Sernageomin study, the Report highlights five mineral zones in the San Juan district with potential for cobalt (and other minerals) extraction: Mineral de Labrar (Zone 1), Quebradita (Zone 2), El Romero (Zone 3), Fraguita and La Cobaltera (Zone 4) (outlined in white in the map here depicted).6 In these zones, "samples of primary ore rocks from mineral piles, trenches and vein outcrops" yielded between 0,001 and 1,95% cobalt, 7,9 and 0,037% copper, 1,1 and 0,1 g/t gold, 8,8 and 0,5 g/t silver, 4,7 and 0,023 g/t cadmium, and 0,49 and 0,023% nickel. The Report suggests that further assessments should be conducted at the now closed mines of La Cobaltera, Blanca, Verde, Prosperidad, Lea, Rosa Amelia and Delirio. It also calls for further exploration of the sectors of Paulita, Verde and Cortadera, which hold over 0,5% average ore grade Co and Labrar, Romero 2, Quebradita Norte and Fraguita, with Co concentrations of 0,1 to 0,5%.7
There is no updated data available regarding cobalt ore grades for the Tambillos district, but the Report notes that exploration is currently underway for cobalt and copper resources. The Report also estimates that the Minillas and Buitre mines' mineral piles could contain under 1% cobalt concentration, and the tailing deposits of mining conducted by Compañía Minera Florida should contain cobalt, but this has not yet been established.9
Sernageomin's Exploration of Atacama and Coquimbo
In 2016, Sernageomin conducted sampling (the "2016 Sernageomin Study") in the metallogenic province in the coastal cordillera of the Atacama and Coquimbo regions in northern Chile (between the towns of Chañaral and Huasco), identifying mineralization and hydrothermal alteration zones.10 Besides supporting the Report's findings on San Andres and Tambillos, the 2016 Sernageomin Study identified the following districts as prime areas of interest for cobalt concentrations: "Sierra Santo Domingo (Z1), Las Animas (Z2), Algarrobo – El Roble, Relincho, San Ramon – Zorroquina and Quebrada Seca (Z3), Punta del Cobre and Las Pintadas (Z4), Descubridora de Quebrada Seca, Sierra El Tiuque, Totoral Norte and Quebrada Los Loros, Sierra La Noria and Sierra Algarrobilla (Z5), and Carrizal Alto, Astillas, Sierra La Bandera and Quebrada del Medio (Z6)." Cobalt values averaged 1242 ppm in these areas, while nickel at 200 ppm, molybdenum at 585 ppm and 2.2% copper were also identified.11
Historical Cobalt Production in Chile
Historically, cobalt has only been produced in significant quantities in Chile in the districts of San Juan and Tambillos, with a small amount also produced at the Merceditas mine in the Cajon del Maipo sector (Metropolitan Region). The production at the San Juan district was mainly of secondary ores with grades of up to 6.4% Co, and mineralization in the district consists of cobaltite veins and lesser mantos with average ore grades of up to 1.6% Co.12
Tambillos' production consisted of copper, gold and cobalt, which were found in manto, breccia and vein forms. Today, only copper and gold are extracted at Tambillos, and, as mentioned above, no updated data exists regarding cobalt. However, 1942 records indicate that Tambillos' Co ore grades sat at between 4 and 5%, and exploration data revealed average 1% Co ore grades. Metropolitan Region's Merceditas mine's average ore grades ranged between 0.5 and 0.7%, reaching a maximum of 2.4 to 2.58% Co.13
A Comeback for Chilean Cobalt?
Commenting on the Report's results in the context of the growing electric car industry, the Vice-President of Corfo Eduardo Bitran noted that "suddenly, we have the possibility of becoming producers of cobalt. We have the triad of cobalt, lithium and copper which are produced while generating low-emissions, which is possible due to our enormous solar [energy] potential."14 As Bitran notes, Chile is exclusively well positioned to pursue cobalt production in connection with the "triad" of minerals needed to supply the growing electric car industry. Current trends support this: the recent election of former President Sebastian Piñera to the Chilean presidency, a business man known for his support of the mining industry and stable, growth-oriented economic policies, combined with the expected rise in demand for cobalt of 34% per year until 2026, make it an exciting time for what could become the comeback of cobalt mining in Chile.15
An English version of the Report is available here.
1 CORFO, "Corfo, Sernageomin y Comité de Minería No Metálico dan a Conocer Estudio del Cobalto en Chile" (12 December 2017), online: https://www.corfo.cl/sites/cpp/sala_de_prensa/nacional/12_12_17_estudio_del_cobalto_en_chile
3 Bloomberg, "Hunt for Next Electric-Car Commodity Quickens as Prices Soar" (23 August 2017), online: https://www.bloomberg.com/news/articles/2017-08-22/hunt-for-next-electric-car-commodity-accelerates-as-prices-soar
4 Supra, note 1.
6 Ibid; Waldo Vivallo, Alejandro Diaz & Rodrigo Jorquera, "Yacimientos Metalíferos de la Región de Atacama, Escala 1:500.000" in Carta Geológica de Chile, Serie Recursos Minerales y Energéticos: n. 27 (Santiago: SERNAGEOMIN, 2008), online: http://biblioteca.sernageomin.cl/opac/index.asp?param=o%AD%88%92bh%93%88oc&Op=3; Please note that the 1983 exploration study, entitled "Geoexploraciones", was not available Sernageomin's website.
7 Supra, note 1; This map identified the four zones in the San Juan district in the Atacama Region (south of Huasco city), and was extracted from the Report (see supra, note 5). Please refer to the map that is included in our blogpost "Chile Getting Ready to Supply Minerals for the Upcoming Electric Car Industry: What's Next for Cobalt" from 5 October, 2017 for further geographical references to the San Juan district (said map pinpoints the "La Cobaltera" area located in the San Juan district): https://www.miningprospectslawblog.com/2017/10/05/chile-getting-ready-to-supply-minerals-for-the-upcoming-electric-car-industry-whats-next-for-cobalt/.
9 Supra, note 1; Please note that the Report cites a Sernageomin study by Diaz et al. from 2009 to support its findings regarding Tambillos, but we have not been able to locate said study in Sernageomin's website. We have reached out to Sernageomin requesting the said study and will update this reference when received.
10 Supra, note 1; Juan Pablo Lacassie, Waldo Vivallo & Alejandro Diaz, "Caracterización Geoquímica de los Yacimientos Metalíferos de la Región de Atacama Mediante el Uso de las Redes Neuronales Artificiales" (Santiago: SERNAGEOMIN, 2016) online: http://biblioteca.sernageomin.cl/opac/index.asp?param=o%AD%88%92bp%95%8Dob&Op=3
11 Supra, note 1.
15 Supra, note 3.
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